Market Report: Silver Shortage

by Alasdair MacLeod
Gold Money

After last week’s extreme volatility gold and silver consolidated this week, with gold down $10 on balance at $1933 this morning, European time, and silver was up 65 cents at $27.05.

The position with silver is tricky for the bullion banks, which have generally managed to steer clear of being short. In recent weeks they have managed to reduce their net short position to 3,736 contracts (11 August) and we will get an update after hours tonight. The long-term chart puts this in context.

[…] It appears that Swiss refiners are concentrating on refining gold to the exclusion of silver, which has aggravated the shortage of silver bars, which is also the feedstock for production of silver coins. Meanwhile, public demand for the SLV ETF continues apace, forcing demand for more bullion. SLV now accounts for about 50% of LBMA stocks, the rest being stored by industrial users with some in the hands of investors, who for the moment are enjoying the ride.

Continue Reading at…